FAQs - Tax certificate sale

AUCTIONS

What is an internet auction?
An auction in which bids are transmitted and received through the Internet using a computer and a web browser.

What equipment or software do I need to be able to participate?
A bidder must have a computer with Internet access and a web browser. If you do not have access to a computer, Volusia County libraries have computers that are available for public use during regular business hours.

Who will show me how to use the internet auction system?
Users are encouraged to participate in a Self Demo, Trial Auction or a Guided Demo prior to bidding.
Self Demo - Please log in with your ID and password, and click "Auction Demo" under Auction Site Training Tools. The instructions are designed to lead users through the auction process.
Trial Auction - Please log in with your ID and password, and click "Trial Auction" under Auction Site Training Tools. The Trial Auction is a simulation of a real auction, in which bidders practice bidding and, subsequently, viewing auction results.
Guided Demo - Please contact Auction Support to receive a Guided Demo (which is available only after user completes the Self Demo). Auction Support will guide the user through the auction process on the website over the phone at 800-410-3445.

Where and when will the auction be advertised and how often?
The listing of unpaid taxes is published in the Daytona Beach News-Journal on or about the first week of May. The list is published three times in May. The Daytona Beach News-Journal can be contacted at: 901 6th St., Daytona Beach, FL 32117 Phone: 386-252-1511 or via the internet at http://www.news-journalonline.com/.

What is a batch?
A batch is an auction subgroup of the advertised list that serves as a means of organizing tax certificates for the purpose of facilitating bid submission. Each tax certificate in each batch is auctioned independently of every other tax certificate and arranged in sequential order with a unique auction closing time for each batch. In each batch, the properties are listed in the order they are listed in the advertisement which is the order they appear on the tax roll. This order cannot be changed.

BIDDING

How does the bidding proceed?
Each parcel is auctioned in the order listed in the publication. The bidding begins at 18 percent (the maximum rate) and is bid down. The "winning" bidder's number and rate of interest are recorded. Any item not bid upon is "struck" to the County.

When are my bids due?
Bids can be submitted on the website once the advertised list is published on the Internet, usually in early May. The advertised list will be divided into batches. Bids can be withdrawn or altered at any point up to the closing of the batch on the day of the sale.

When do the bidders have to pay the amount due for their purchases?
Bidders will receive an email invoice indicating the total amount due, if any. All payments must be made via ACH from the payments page of the BidVolusia.com website no later than 48 hours after close of sale.
Failure to pay for all certificates by that date will result in the loss of the deposit and forfeiture of all the certificates. The certificates will be re-sold at a later date.

What is proxy bidding?
In a live auction, a bidder will lower his bid by quarter percent increments until he is the only bidder left or until the interest goes below his acceptable minimum level, at which point he would drop out. Proxy bidding is a form of competitive sale in which bidders enter the minimum interest rate that they are willing to accept for each certificate. The auction system acts as an electronic agent, submitting bids on behalf of each bidder. The result of the proxy system is that the electronic agent keeps lowering the bid to submit by quarter percent increments until you are either the only bidder left, (in which case you get the certificate at a quarter percent lower than the previous bid) or until you reach the floor you have set. Zero percent bids will not be treated as proxy bids. They will be awarded at zero. If you are the only bidder on a given certificate and your minimum rate is greater than zero percent, the electronic agent will submit a bid of 18 percent on your behalf. In the case of a tie at the winning bid rate, the system awards to one of the tie bidders through a random selection process using a random number generator. In no case will a bidder be awarded a certificate at a rate lower than his specified minimum acceptable rate. Certificates that receive no bids after all batches are closed will be struck to the County at 18 percent.

MISCELLANEOUS

Can I pay the taxes and own the property?
No. You have not purchased property. A tax certificate is an investment. This investment does not convey any property rights or ownership to the certificate holder.

Can I borrow the keys or make an appointment with the Volusia County Revenue Division to view the property so that I can look at it before I buy?
The Volusia County Revenue Division does not have the keys to the property and knows nothing about the condition of any property. You must do your own research.  Maps are available to the public at the Property Appraiser’s office and on their website. The Volusia County Revenue Division can only tell you about the taxes that are due.

Can I contact the property owner and convince them to pay?
A certificate holder who initiates, or whose agent initiates, contact with the property owner upon which he or she holds a certificate encouraging or demanding payment may be barred by the tax collector from bidding at future tax certificate sales. Unfair or deceptive contact by the holder of a tax certificate to a property owner to obtain payment is an unfair and deceptive trade practice according to law, regardless of whether the tax certificate is redeemed. Such unfair or deceptive contact is actionable under applicable laws prohibiting fraud. Neither a certificate holder nor an agent, can take any action against the property and/or the property owner (direct or indirect) until 2 years from April 1 of the year of delinquency. After that period of time, an application for Tax Deed can be made, which forces the owner to pay the back taxes, or the property is sold at a public auction to the highest bidder.

Do liens follow the property?
Government liens always follow the property. It is important to research the payment history and type of property before you bid on certificates.

PAYMENTS. INTEREST AND REDEMPTION

What is an ACH debit?
An ACH debit is an electronic funds transfer from your bank account, initiated by the Tax Collector with your prior authorization. Debits entered on the web site will be submitted immediately for processing. Funds must be drawn from a US financial institution. Some types of money market, brokerage, and/or trust accounts cannot accept ACH debits. Please check with your financial institution prior to initiating payment on the web site. For more information on ACH, please visit the NACHA, the Electronic Payments Association at www.nacha.org.

What happens to my security deposit if I do not win any certificates in the auction?
Refunds for unused portions of the deposit will be issued by check within four weeks of the conclusion of the tax certificate sale.

Can interest rates be changed after the bid?
When a certificate is redeemed and the interest earned is less than 5 percent, a mandatory charge of 5 percent is due. This applies to all certificates except those with an interest rate bid of 0 percent. If a certificate should be canceled or reduced, the interest earned will be 8 percent per year, simple interest or the rate of interest bid at the tax certificate sale, whichever is less on the canceled or reduced amount. Bankruptcy rulings may also affect interest rates.

How do I get paid?
When a certificate has been redeemed (owner, title company or mortgage company pays the outstanding taxes to the Volusia County Revenue Division), the certificate holder is entitled to the face value plus whatever interest the certificate has earned. Proceeds are remitted weekly to the certificate holder. The certificate holder is never paid directly unless it is from a Bankruptcy Trustee. If that happens, the certificate holder must notify the Volusia County Revenue Division when he/she is paid in full and request that the certificate be canceled.

Does Volusia County guarantee payment?
Volusia County DOES NOT guarantee eventual payment of tax certificates. Risks exist! You must do your research.

What is the redemption period of a tax certificate?
The property owner can redeem a certificate at any time until the property is sold at a tax deed sale OR until the certificate has expired (seven years after the date of issuance).

TAX CERTIFICATES

What are “tax certificates"?
An interest bearing first lien representing unpaid delinquent real estate property taxes which are offered for sale by the Volusia County Revenue Division through competitive bid to pay delinquent taxes. Tax certificates are not recorded liens nor are they reported to any credit bureaus. They are a "first" priority lien.

Who may participate in the tax certificate sale?
Anyone. To participate in the sale a bidder must register with the Volusia County tax office via the BidVolusia.com website. A bidder number is assigned for identification purposes during the sale. Bidders are required to make a deposit via Automated Clearing House (ACH) Debit on the BidVolusia.com payments page that is 10 percent of the estimated amount they intend to purchase. The deposit may be increased any time prior to the close of the auction. Registered bidders must provide their Federal Taxpayer Identification number or Social Security number.  All interest earned will be reported to the IRS on form 1099-int.

Are tax certificates always a good investment?
The following possibilities, though not inclusive, are some of the non-cost recoverable circumstances that could affect the amount of interest you earn on your investment and/or the amount of your investment:
Owner files bankruptcy (interest could be reduced and/or Trustee will send you $x per month, etc.)
Department of Revenue correction on the taxes
Court orders the omitting of taxes
Assessed value on the property by the Property Appraiser may be in error and not subject to retroactive correction when the problem is discovered
Parcel may have had an assessed structure or wood frame home that is subsequently burned down or condemned
Parcel may have had a mobile home on it at the time of the tax certificate sale which has been removed or destroyed, leaving the property vacant
A condo that is part of a group of buildings that are later condemned or destroyed.

What is the “life" of a tax certificate?
Certificates are dated as of the first day of the sale and are null and void seven years from the date of issuance. When two years have elapsed since April 1 of the year of issuance, the holder of a tax certificate may submit a Tax Deed Application to the Volusia County Revenue Division.

How does someone acquire a tax certificate?
Tax certificates are sold to the bidder who offers to purchase at the lowest rate of interest in the public auction which is conducted on or before June 1 of each year. That auction is called a Tax Certificate Sale.

Are tax sale certificates transferable?
Certificates may be transferred by completing the transfer form and paying the applicable fees. Note: Not all certificates can be transferred. Some examples include those properties that where a tax deed application has been submitted. If the certificate is eligible for transfer, the seller of the certificate must complete the required paperwork which requires notarization.

The new buyer must be a registered buyer. If the buyer is not a registered buyer, he/she will be required to complete and file form W-9 "Payer's Request for Taxpayer Identification Number and Certification" (TIN) for each buyer number assigned as all interest will be reported to the Internal Revenue Service. A single buyer number will be assigned for each Social Security number (SSN) or Employer Identification Number (EIN) provided and must be identical to the name provided on the W-9 form. Any change to a tax certificate will constitute a transfer and will be subject to the appropriate fees and paperwork for each certificate bought under that number. The transfer paperwork must be presented to the Volusia County Revenue Division along with the fee of $2.25 per certificate before the transfer is valid.

Why would a certificate be canceled or reduced?
When the Property Appraiser issues corrections for errors, omissions or double assessments; or when ordered by a court.